k) Provisions and Contingent Liabilities
Provisions are recognized when there is a present obligation arising out of past events, settlement
of which is expected to result in an outflow of resources. Provisions include legal and statutory
obligations related to closure.
l) Cash Flow Statement
Cash flows from discontinued operations are disclosed separately under the indirect method.
Cash and cash equivalents include balances with banks and short-term deposits.
m) Non-Current Assets Held for Sale and Discontinued Operations
The company has classified its manufacturing operations as discontinued. Assets have been
reclassified as “held for sale” and are measured at the lower of carrying amount and fair value less
cost to sell, and depreciation has ceased. Results of discontinued operations are disclosed
separately in the financial statements.
n) Earnings Per Share
Basic earnings per share is computed by dividing the net profit or loss for the period attributable to
the equity shareholders of the company by the weighted average number of equity shares outstanding
during the period. The weighted average number of equity shares outstanding during the period
and for all periods presented is adjusted for events, such as bonus shares, other than the conversion
of potential equity shares, which have changed the number of equity shares outstanding, without a
corresponding change in resources.
Diluted earnings per share is computed by dividing the net profit or loss for the period attributable
to the equity shareholders of the Company and weighted average number of equity shares considered
for deriving basic earnings per equity share and also the weighted average number of equity shares
that could have been issued upon conversion of all dilutive potential equity shares. The dilutive
potential equity shares are adjusted for the proceeds receivable had the equity shares been actually
issued at fair value (i.e. the average market value of the outstanding equity shares).
1. The above land is revalued as per Ind AS and the original land value before Ind AS revaluation is Rs.59 lakh. Factory land
of 126.13 acres is located at Rudraram P.O., Kandi Mandal, Sangareddy Dist. Telangana State and land is freehold. HOCL
is secured part of land to the extent of 84.31 acres.
2. Fair value of total land as on 31.03.2025 is Rs.14663.57 lakh. Since the fair value of the land is higher than the carrying value
as per books of accounts, carrying value of the land held for sale continues to be reported in accordance with para 15 of Ind
AS 105.
3. Buildings include Time Office building (Gross value of Rs.4.33 lakh), Security Post (Gross value of Rs. 4.55 lakh) and Fencing
& Compound Wall (Gross value of Rs.145.58 lakh). Total Gross value Rs.154.46, Accumulated depreciation: Rs.39.56 lakh
and Net value Rs.114.90. Depreciation not provided during the year since there are no operations in the company.
The Company’s Provident Fund was exempted under section 17 of Employees’ Provident Fund and
Miscellaneous Provisions Act,1952. As per the directives of Closure letter received from DCPC on
29.01.2020, company had started giving VRS to employees from May, 2020 onwards to Sept, 2022
and even non-regular employees were relieved on VSS during Oct, 2022. Remaining five (5) regular
employees of HFL were transferred and posted to HOCL rolls w.e.f Sept, 2022. Since there is no
employee in HFL, the Board in its meeting held on 30.01.2023 has approved to close the Employees
Provident Fund Trust and surrender the balance amount with the Trust with Employees Provident fund
Organisation after audit. Based on the application submitted to the Employees Provident Fund
Organisation, they withdrawed the exemption vide letter dt.16.04.2024.
As per the directives of Closure letter received from DCPC on 29.01.2020, all the employees were
relieved by Sept. 2022. Since there is no employee in HFL, the Board in its meeting held on 30.01.2023
has approved to close the Employees Group Gratuity Trust and surrender the Insurance Policies
available with LIC. Accordingly the Trust was closed, settled the account by LIC and closed the bank
account on 04.04.2024.
i) Claims against the company not acknowledged as debt: Details
a) ESI: Rs.13.46 lakh
ESI demand by ESI Corporation dues of Rs.15,99,902/- towards contribution of 153 employees
for the period from 01.01.1997 to 30.09.2000. HFL has remitted Rs.7,99,951/- as per court order
towards 50% of the principal amount. Interest claimed upto 31.03.2001 was Rs.5,46,139. Therefore,
the balance amount of Rs.13,46,090 (1599902 546139-799951) shown as contingent liability.
b) Damages on Delayed Payment of Provident Fund with Interest: Rs.94.89 lakh
This is the damages demanded by EPFO towards delayed payment of PF dues during the period
2000-01 to 2010-11. The Company has written to Central Provident Fund Commissioner for waiver
of damages for delayed payment of PF dues during the period 2000-01 to 2010-11 considering the
fact that the company was a BIFR referred Company.
c) Other Claims (Legal cases): Rs.1099 lakh
1. WP/24588/2013 before Hon’ble High court judicature for the state of Telangana & for AP: Mr.
T.Eshwaraiah, Ex-Chief Mgr (HR) had opted VRS in 2009 and relieved from the services on
31.01.2009. Consequent to revision of pay scales of 1997 & 2007 a writ petition was filed by him
in June, 2013 on account of wage revision arrears. Vakalat and Counter is filed by the company.
Matter pending before Hon’ble High Court; The HFL Board had also clarified that VRS-2009
optees are not eligible for wage revision arrears. Even the DCPC also clarified the same. Hence,
in the view of the Company, the case is not tenable in law. The final hearing was held on 11.11.2024
and the Court has dismissed his claim and Disposed the case.
2. WP/12909/2013 before Hon’ble High court Judicature for the state of Telangana and for AP:
Mr.V.Giridhar & others had opted VRS in 2009 and relieved from the services on 31.01.2009.
Consequent to revision of pay scales of 1997 & 2007 a writ petition was filed by them in June,
2013 on account of wage revision arrears. Vakalat and counter filed by the company. Matter
pending before Hon’ble High Court; The HFL Board had also clarified that VRS-2009 optees are
not eligible for wage revision arrears. Even the DCPC also clarified the same. Hence, in the view
of the Company, the case is not tenable in law. The final hearing was held on 11.11.2024 and the
Court has dismissed his claim and Disposed the case.
3. LC ID-1 of 2015, before Hon’ble Central Govt. Industrial Tribunal, Hyd.: Mr. N. Rambabu, Production
Chemist filed ID before ALC (Central), Hyd. A Counter has been filed by the respondent company.
The Company had terminated the employee during January, 2014 after following the laid down
provisions of Certified standing orders of the company. Since the Company had terminated him by
following the approved procedures, hence the case will not tenable before the Honorable Court.
4. ID No.72 of 2012 before the Hon’ble Central Govt. Industrial Tribunal-cum labour Court, Hyderabad:
The HFL workers’ trade union-A 4397 has raised an ID before ALC (Central), Hyd with a request to
intervene in the matter of non-payment of overtime wages. In this connection, joint proceedings
were held and issue could not settle amicably, having divergent views, the conciliation officer has
submitted its failure report to Govt. of India. The respondent company has filed counter petition.
As per GOI guidelines, the financial impact on account of Pay revisions for both 1997 and 2007
need to be borne by the company, since no budgetory support was not extended. Based on the
commitment to DPE in writing by the recognized representative union A-3954, the GoI, had issued
orders for pay revision was approved by the Board of HFL and implemented. The non-representative
union -A 4397 had approached court of law for non-payment of overtime wages and filed a petition,
hence this case is pending before court of law. Since existing employees are already availing the
compensatory off in lieu of over time, the case will not tenable before the Honourable Court. On
25.04.2023 the case was heard and reserved for Judgement.
5. WP/9697/2000 & WA 483/2013 WA No.1194/2012 before Hon'ble High court, AP Hyd:
Mrs.K.Nagaratnam, Asst. Mgr (Finance) has reinstated into service without back wages. Aggrieved
on the order, she has filed writ appeal and counter was filed by the respondent company. The
employee was re-instated as per High Court order without back wages and superannuated from the
services of the company on 31 -Aug-2016. She has filed an appeal for back wages in the Hon'ble High
court, Hyderabad and case is pending. The case is pending under CAV. The case is listed again on
28.02.2024 and continuing. On 30.12.2024 the final hearing was held and case is referred to CAV.
6. WP No. 20076/2019 before Hon'ble High Court Hyderabad: Smt K Rajani, Ex-Company Secretary,
T.No. 262 had filed the WP against the reverification of “Pay Scale / Basic Pay anomaly fixed in
September 2011”. Some of the Officers have represented the company that there is an anomaly in
fixation of Pay Scale and Basic Pays against 1997 Pay Revision and have requested for refixation.
The same is refixed in September 2011 to 18 Officers, one of them being Smt K Rajani. whose
Pay scale and Basic Pay also refixed under anomaly. She had filed a case in High Court that the
reverification and refixation of her pay scale / basic pay in February 2019 is not correct.
7. CGIT No. 134/2018: HFL Employees Union A 3954. For implementation of 2017 Wage Revision.
8. OP No. 709/1998 before CCC, Hyderabad. CMA 2861/203 before High Court, CMA 918/2018
before High Court, COP No. 42/2019 before XXIV Addl. Chief Judge, CCC, Hyderabad, COMCA
16/2020 before XXIV Chief Judge, CCC, Hyderabad. Now CMA 918/2018 and COMCA 16/2020
are tagged: Case filed by M/s Rockwell Industries Limited relating to supply of CFM-22 Gas. IDBI
was impleaded in the case and IDBI has filed the counter. This dispute is going on since 1998 at
various Forums - Arbitration in 1998, Hon'ble Chief Judge in 2001, Hon'ble High Court later which
was sent back for fresh consideration. Again in 2017, Hyd Civil Court confirmed Order of Arbitrator,
party filing fresh COP before Addl Chief Judge, City Civil Court and HFL filed case in Hon'ble High
Court of Telangana. Matter presently is still before Hon'ble High Court of Telangana, which had
vide its Order dated 04.11.2020 has given stay on disposal of the assets of the Company. The
Case is Pending now. On 02.11.2022 the case was heard on vacating of Stay. The permission
was granted to dispose of Plant and Machinery through MSTC and the Order copy is received on
04.11.2022. In this regard the court has directed HFL to open a separate Bank Account to
deposit the sale proceeds of Plant and Machinery. The plant sale proceeds were received on
29.03.2023 and the amount of Rs.14.21 crore was deposited in SBI as as FD. The Final Arguments
were held on 28.11.2024 and case is reffered to CAV.
9. WP No. 35920/2021 in Hon'ble High Court, Hyderabad: The TSSPDCL has levied the differential
wheeling charges and issued notice to pay the wheeling charges around Rs.6.14 Crores for the
period 2002 to 2004. If the same is not paid within fifteen days alongwith the monthly power bill
the service will be disconnected. Aggrieved by the Notice of TSSPDCL, HFL has approached the
Hon'ble High Court and the matter was heard and the Hon'ble High Court had granted Stay on
24.12.2021.
26. Financial Instruments
a) Capital Management
The Company’s capital management objective is to maximize the total shareholder return by
optimizing cost of capital through flexible capital structure that supports growth. Further, the
Company ensures optimal credit risk profile to maintain/enhance credit rating.
The Company determines the amount of capital required on the basis of annual operating plan and
long-term strategic plans. The funding requirements are met through internal accruals and long-
term/short-term borrowings. The Company monitors the capital structure on the basis of Net debt
to equity ratio and maturity profile of the overall debt portfolio of the Company.
For the purpose of capital management, capital includes issued equity capital, securities premium
and all other revenue reserves. Net debt includes all long and short-term borrowings as reduced
by cash and cash equivalents.
c) Financial Risk Management Objectives
The company’s business activities exposed to a variety of financial risks viz., market risk, credit
risk and liquidity risk. The company’s focus is to estimate a vulnerability of financial risk and to
address the issue to minimize the potential adverse effects of its financial performance.
d) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices. Such changes in the values of financial instruments may
result from changes in the foreign currency exchange rates, interest rates, credit, liquidity and
other market changes. The company’s exposure to market risk is primarily on account of foreign
currency exchange rate risk.
i) Interest Rate Risk
Out of total borrowings, large portion represents short term borrowings and the interest rate
primarily basing on the company’s credit rating and also the changes in the financial market.
Company continuously monitoring over all factors influence rating and also factors which
influential the determination of the interest rates by the banks to minimize the interest rate
risks.
ii) Foreign Currency Risk
The company has no balances in foreign currency and consequently the company is not
exposed to foreign exchange risk.
Equity Risks
The company does not have any financial instruments which are exposed to listed and non listed
equity investments.
e) Credit Risk Management
Credit Risk refers to the risk for a counter party default on its contractual obligation resulting a
financial loss to the company. The maximum exposure of the financial assets represents trade
receivables, work in progress and receivables from group companies. Credit risk on trade receivables,
work in progress is limited as the customers of the company mainly consist of the Government
promoted entities having strong credit worthiness. For doubtful receivables the company uses a
provision matrix to compute the expected credit loss allowances for trade receivables. The provision
matrix takes into account ageing of accounts receivables and the company’s historical experience
of the customers and financial conditions of the customers. The company has not made any
provision towards amounts doubtful to receive during the year ended March 31,2025 and March
31,2024 respectively.
f) Liquidity Risk Management
The Company manages liquidity risk by maintaining adequate reserves, banking facilities and
reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by
matching the maturity profiles of financial assets and liabilities. As per CCEA approval for Shut¬
down of the company, HFL has received an amount of Rs.75.87 Crore for implementation of VRS/
VSS, Statutory dues, payment to suppliers/contractors/utilities and other dues. The proceeds
from sale of Land, Building, Plant & Machinery and other assets shall be utilised for meeting its
contractual obligations. Note No.37 about CCEA procedure for disinvestment and sanction of loan
from GOI details that the Company has financial assets at its disposal to reduce liquidity risk.
27. Amendment to Ind AS 7:
The amendment to Ind AS 7 requires the entities to provide disclosures that enable users of
financial statements to evaluate changes in liabilities arising from financing activities, including
both changes arising from cash flows and non-cash changes, suggesting inclusion of a reconciliation
between the opening and closing balances in the balance sheet for liabilities arising from financing
activities, to meet the disclosure requirement.
The Company is currently evaluating the requirements of the amendment and has not yet determined
the impact on the financial statements.
28. During the year under review, the Company had revisited its status on the reporting of Financial
Instruments through OCI at amortized cost based on updated developments. Accordingly, based
on realistic assessment of the underlying transactions, the Company is of view that there are no
Financial Instruments which are receivable/payable in future at discounted values and hence these
are shown at actual values. Accordingly, the corresponding effect between previous year and current
year is passed through OCI.
29. As per the letter dated 29.01.2020 from the Ministry of Chemicals and Fertilizers, Department of
Chemicals & Petrochemicals, under which the Company functions, Cabinet Committee on Economic
Affairs (CCEA) in its meeting held on 22nd Jan, 2020 had approved.
a) Shutting down the operations of the plant/unit of HFL & closure of the Company.
b) Separating the employees (regular and non-regular/adhoc) rendered surplus due to closure of
plant through VRS/VSs, after payment of all their outstanding salary/wages and statutory
dues, except for skeletal staff required to implement the full and final closure of the company.
Employees not opting for VRS/VSS will be retrenched as per the provisions of Industrial
Disputes Act, 1947.
c) Grant of interest free loan of Rs.75.87 crore by Govt. Of India to HFL to be utilized exclusively
for closure related expenditure including (a) implementation of VRS/VSs for HFL employees,
their dues, statutory dues, payment to suppliers/contractors/utilities dues and repayment of
SBI working capital loan (b) salary/wages and administrative expenses of HFL’s skeletal staff
to be temporarily retained for completing the closure of HFL for two years.
d) Above interest free loan will be repaid by HFL to Govt. of India from the sale proceeds of land
and other assets of the company, as and when disposed off and after settling all the liabilities
related to closure of the company
e) After settlement of all liabilities related to closure of HFL and repayment of interest free loan,
surplus proceeds from disposal of land and other assets, if any, will be used for repayment of
HFL’s outstanding Govt of India (Rs.15.80 crore) and interest thereon, with freezing of interest
upto 31.3.2019. Full or part of the principal loan amount (Rs.15.80 crore) and interest thereon
upto 31.3.2019 remaining unpaid due to insufficient sale proceeds is to be written off/waived.
f) For facilitating disposal of HFL’s land, M/s NBCC (India) Ltd may be appointed as Land
Management Agency (LMA) to manage and assist in the land disposal subject to outcome of
the decision of Telangana Govt/TSIIC on purchasing land of HFL.
g) Disposal of plant, machinery and movable assets were done in March 2023 by HFL through
e-auction by MSTC Ltd.
h) In pursuance of the said decision, HFL had received an amount of Rs.73.70 Crore on 26.05.2020
and Rs.2.17 Crore on 15.03.2022 as interest free loan from GoI. As per the above CCEA Order
and as at 31.03.2023, all the employees were relieved before 31.08.2022 except five skeleton
staff who were transferred to the roll of HOCL in Sept 2022. All the undisputed dues except
Govt. loans and HOCL loans were settled by utilising the interest free loan sanctioned by the
Govt. of India. The total amount utilized upto 31.03.2025 was Rs.68.84 Crore. The balance
amount will be utilized for settling the other dues and other operating expenditure for completing
the closure of the Company. The said process is still going on.
30. Previous year’s figures have been regrouped / reclassified wherever necessary to correspond with
the current year’s classification / disclosure.
In terms of our report attached For and on behalf of the Board of Directors
For AVRSK & Associates LLP of Hindustan Fluorocarbons Ltd.,
Chartered Accountants
FRN 003028S / S000113
Sd/- Sd/- Sd/-
CA. GK. BABU SAJEEV B. YOGENDRA PRASAD SHUKLA
Designated Partner Managing Director & CEO Director
M No.213273 DIN No. 09344438 DIN No. 09674122
UDIN No.25213273BMJGIT1051
Sd/- Sd/-
P.O. LUISE SUBRAMONIAN H.
Chief Financial Officer Company Secretary
Place: Hyderabad Place: Kochi
Date: 15-05-2025 Date: 15-05-2025
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